Government receivables · updated November 12, 2026
How fast do governments pay their vendors?
The short answer
Federal agencies generally must pay within 30 days of a proper invoice, or owe interest at the Treasury Prompt Payment rate, 4.75% for July 1, 2026 to December 31, 2026. Most states set their own deadline for state agencies, commonly 30 to 45 days, with interest when they pay late.
- Federal deadline
- 30 days after a proper invoice
- Federal late-pay rate
- 4.75%
- Rate period
- July 1, 2026 to December 31, 2026
- States with a rule
- 50 of 51
The federal Prompt Payment Act
The Prompt Payment Act (31 U.S.C. 3901-3907; 5 CFR 1315) sets when federal agencies must pay contractors and what they owe when they are late. Interest runs from the day after the due date through the payment date, at the Treasury rate in effect on the day after the due date, using a 360-day year (5 CFR 1315.10). The agency must pay it automatically, whether or not the vendor asks, and must include a notice showing the amount, days late and rate. Unpaid interest at the end of each 30-day period is added to principal, so it compounds every 30 days. Interest stops after 1 year or when a claim is filed under the Contract Disputes Act. Amounts under $1 need not be paid, and no interest is due when payment is held up by a contract dispute or a required contract withholding.
| Period | Annual rate |
|---|---|
| July 1, 2026 to December 31, 2026 | 4.75% |
| January 1, 2026 to June 30, 2026 | 4.125% |
| July 1, 2025 to December 31, 2025 | 4.625% |
| January 1, 2025 to June 30, 2025 | 4.625% |
| July 1, 2024 to December 31, 2024 | 4.875% |
| January 1, 2024 to June 30, 2024 | 4.875% |
| July 1, 2023 to December 31, 2023 | 4.875% |
| January 1, 2023 to June 30, 2023 | 4.625% |
| July 1, 2022 to December 31, 2022 | 4% |
| January 1, 2022 to June 30, 2022 | 1.625% |
Work out what an agency owes you on a late invoice with the prompt payment interest calculator.
Factoring federal invoices: the assignment of claims
Federal law generally blocks a contractor from transferring its right to payment on a government contract. The Assignment of Claims Act carves out an exception so a contractor can assign payments to a bank, trust company or other financing institution, which can include a factor that finances the contract. All of these must be true: the contract calls for payments totaling $1,000 or more; the contract does not prohibit assignment; unless the contract allows otherwise, the assignment covers all unpaid amounts, goes to only 1 party (which may act as agent for several lenders), and is not assigned again; and the assignee sends written notice with a true copy of the assignment to the contracting officer, any surety on the contract bond, and the disbursing officer. Once that is done, the government pays the assignee directly. Unless the contract has a no-setoff commitment, the government can still offset certain debts the contractor owes it. Without an assignment that meets these rules, the government generally does not have to recognize the factor: it can keep paying the contractor, and the factor must collect from the contractor instead. This is general information, not legal advice.
Cites: 31 U.S.C. 3727; 41 U.S.C. 6305; FAR Subpart 32.8. More in factoring for government contractors.
State agency payment deadlines, all 50 states and DC
| State | Must pay | Late interest | Statute |
|---|---|---|---|
| Alabama | Generally 30 days after the vendor completes its part and presents a proper, undisputed invoice | Interest at the legal rate currently charged by the state on amounts paid late | Ala. Code §41-16-3 (contracts with the State of Alabama) |
| Alaska | By the contract date, or if none, 30 days after receipt of a proper billing | 1.5% per month on the unpaid balance from the required payment date, unless the contract sets a lower rate… | Alaska Stat. §37.05.285 |
| Arizona | Progress payments within 14 days after an estimate is certified and approved; an estimate is deemed approved… | 1% per month on late payments to the contractor | A.R.S. §41-2577 (state construction) and §34-221 (other public agents) |
| Arkansas | Progress payment requests: 5 working days each for the design professional, the agency and the Department of… | 10% a year on unpaid amounts after the 90-day final payment period; an 8% a year penalty against a party… | Ark. Code §19-4-1411 and §22-9-205 (public construction) |
| California | 45 days after receipt of a properly submitted, undisputed invoice | Automatic daily penalty; for FY 2026-27, 16.75% a year for certified small businesses and nonprofits and… | Cal. Gov. Code §927 et seq. (California Prompt Payment Act) |
| Colorado | 45 days after the executive branch liability was incurred | 1% per month on the unpaid balance from the 45th day | C.R.S. §24-30-202(24) |
| Connecticut | On the date the contract sets, or if none, within 45 days of a properly completed claim or receipt of the… | Monthly effective yield of the state Short Term Investment Fund (STIF) on late amounts | Conn. Gen. Stat. §4a-71 |
| Delaware | Interest may be charged if a state agency does not pay within 30 days of the later of a valid invoice or… | Up to 12% a year, billed by the vendor in dollars; on public works, up to 2% above the Federal Reserve prime… | 29 Del. C. §6516 |
| District of Columbia | The contract payment date, or if none, 30 calendar days (excluding legal holidays) after receipt of a proper… | Interest penalty at a rate set by the Mayor's regulations (the statute sets a 1% floor); no penalty if paid… | D.C. Code §2-221.01 et seq. (§2-221.02) |
| Florida | State agencies owe interest if a warrant is not issued within 40 days after receipt of the invoice and… | State agencies: rate set under Fla. Stat. §55.03; local non-construction payments: 1% per month | Fla. Stat. §215.422 (state agencies); §§218.70 to 218.80 (Local Government Prompt Payment Act) |
| Georgia | On construction, generally 15 days after the owner receives a pay request; subs paid within 10 days after… | 1% per month, unless the contract sets a different rate | O.C.G.A. §13-11-1 et seq. (Prompt Pay Act, which applies to public and private construction) |
| Hawaii | No later than 30 calendar days after receipt of a proper statement or satisfactory delivery or performance… | Prime rate (as posted in the Wall Street Journal) plus 2%, from the 30th day | HRS §103-10 |
| Idaho | 60 calendar days after receipt of the bill, unless the contract sets a longer period (45 days for each… | Contract penalty if one is set; otherwise interest accrues automatically on overdue bills at the rate tied… | Idaho Code §67-2302 |
| Illinois | 90 days after receipt of a proper bill or invoice (fiscal year 2012 and later) | 1% per month (0.033% per day) after the 90-day period; interest under $5 is not paid | State Prompt Payment Act, 30 ILCS 540 |
| Indiana | By the date in the contract; if none, within 35 days after receipt of the goods or services or a properly… | 1% per month late payment penalty, added to principal every 30 days | Ind. Code §5-17-5 |
| Iowa | 60 days after receipt of the claim or satisfactory delivery or performance, whichever is later | 1% per month on the unpaid amount | Iowa Code §8A.514(3) |
| Kansas | 30 calendar days after receipt of the goods or services or the bill, whichever is later, unless agreed… | 1.5% per month, but only if the vendor requests it in writing within 4 months; no interest if paid within 15… | K.S.A. 75-6403 |
| Kentucky | Undisputed amounts within 30 business days of receipt of the goods, services or invoice, or as the contract… | 1% per month (or fraction of a month) on undisputed amounts after 30 business days, under KRS 45.454 | KRS 45.451 to 45.458, and a new section of KRS Chapter 45A created by HB 480 (2026 Ky. Acts ch. 147) |
| Louisiana | State agencies owe a penalty if they fail, without reasonable cause, to pay within 90 days of the contract… | Under 39:1695, interest at the judicial interest rate (R.S. 13:4202(B)) from the 91st day after the due… | La. R.S. 39:1695 (state agency vendor payments); La. R.S. 38:2191 (public works contracts) |
| Maine | No more than 25 working days after the later of receipt of a proper invoice or receipt of the goods or… | A late fee no higher than the vendor's normal late charge, running from the day after the required payment… | 5 M.R.S. §§1551 to 1558 |
| Maryland | Within 30 days after the payment due date in the contract or, if later, after the agency receives the invoice | 9% per year on amounts unpaid more than 45 days after the agency receives the invoice, starting on day 31… | Md. Code, State Fin. & Proc. §§15-101 to 15-105 |
| Massachusetts | On the contract date or, if none, not more than 45 days after receipt of a properly approved invoice | Late penalty interest at a rate reset each January 1 and July 1 to match the Federal Reserve Bank of Boston… | M.G.L. c. 29, §29C; 815 CMR 4.00 |
| Michigan | Payment mailed within 45 days after the latest of receipt of the goods or services, a complete invoice, or a… | 0.75% of the past-due amount for each month or part of a month, with no request needed from the vendor | MCL 17.51 to 17.57 (1984 PA 279, payments to private enterprises) |
| Minnesota | State agencies: within 30 days after receipt of the invoice for completed delivery (or within an… | 1.5% per month or part of a month on undisputed bills, with a $10 monthly minimum on balances of $100 or more | Minn. Stat. §16A.124 (state agencies); §471.425 (local governments) |
| Mississippi | 45 days after receipt of the invoice and receipt, inspection and approval of the goods or services | 1.5% per month (or portion of a month) on the unpaid balance after the 45 day period | Miss. Code Ann. §31-7-305 |
| Missouri | Generally 30 days after the later of delivery or receipt of a proper invoice; interest is owed if the bill… | Prime rate plus 3 percentage points, retroactive to the 30th day, on unpaid balances after day 45 (state… | RSMo 34.055 (state agency purchases); RSMo 34.057 (public construction) |
| Montana | When due under the contract, or if no date is set, 30 days after the later of receipt of a properly… | Simple interest of 0.05% per day on late amounts | Mont. Code Ann. §17-8-241 to 17-8-244 |
| Nebraska | 45 calendar days after the later of receipt of the goods or services or receipt of the bill (60 days for… | Rate set under §45-104.02 (federal short-term rate plus 3 points, reset by the Tax Commissioner), accruing… | Neb. Rev. Stat. §81-2401 et seq. (Prompt Payment Act) |
| Nevada | Public works: progress payments within 30 days after the public body receives the bill; contractor pays subs… | Owed to contractor: a quarterly rate tied to 90-day certificate of deposit rates. Owed to subs and… | NRS 338.515 to 338.565 (public works); no general state vendor prompt payment statute found |
| New Hampshire | Not verified | Not verified | Source |
| New Jersey | Generally 60 days after the later of receipt of goods or services or a properly executed invoice, or 60 days… | Interest at a rate the State Treasurer sets each fiscal year, with separate rates for construction and… | New Jersey Prompt Payment Act, P.L.1987, c.184 (N.J.S.A. 52:32-32 et seq.) |
| New Mexico | Agency certifies acceptance or rejection within 15 days of a payment request, then pays within 30 days of… | Late payment charges of 1.5% per month after the 30th day, unless the contract provides otherwise | NMSA 1978 §13-1-158 (Procurement Code, payments for purchases) |
| New York | Generally 30 days after a state agency receives a proper invoice, excluding legal holidays; 15 days for… | Interest at the overpayment rate set by the Commissioner of Taxation and Finance (State Fin. Law §179-g)… | N.Y. State Fin. Law §179-f (state agencies); Gen. Mun. Law §106-b (municipalities); Pub. Auth. Law §2880 (public authorities) |
| North Carolina | Periodic payments follow the contract; the balance due a prime is payable within 45 days after the project… | 1% per month on late payments to primes (from day 46) and to subs (from day 8), unless a lower rate is agreed | N.C. Gen. Stat. §143-134.1 (public construction) |
| North Dakota | By the contract date, or if none, within 45 days after receipt of the invoice | 1.75% per month unless the contract sets a different rate | N.D.C.C. §13-01.1-01 et seq. |
| Ohio | By the contract payment date, or if none, 30 days after the state agency receives a proper invoice; the… | Monthly rate equal to 1/12 of the annual rate set under R.C. 5703.47 (the state's tax interest rate)… | Ohio Rev. Code §126.30 |
| Oklahoma | Generally within 45 days of the designated office receiving a proper invoice | Late-payment interest at an annual rate set from the State Treasurer's average 30-day deposit rate (3.68% a… | 62 O.S. §§34.71 and 34.72; 74 O.S. §500.16A; OMES Prompt Payment Rules (OAC 260:10) |
| Oregon | Claims are overdue if not paid within 45 days of the latest of invoice receipt, billing statement or the… | Two-thirds of 1% per month, capped at 8% a year, on overdue state agency accounts | ORS 293.462 |
| Pennsylvania | 30 days after receipt of a proper invoice when the contract sets no due date, with a 15-day grace period… | Interest penalties at the rate the Secretary of Revenue sets for overdue taxes; required for qualified small… | 72 P.S. §1507 (Fiscal Code); 4 Pa. Code §§2.31-2.40 |
| Rhode Island | Within 30 calendar days of receipt of a proper invoice, or by other contractual periodic payment dates | The prime rate as published in the Wall Street Journal on the first business day of each month, compounding… | R.I. Gen. Laws §42-11.1-1 et seq. |
| South Carolina | Payment vouchers must reach the Comptroller General within 30 work days of acceptance of the goods or… | Up to 15% a year on the unpaid balance after the 30th work day, unless the vendor waives it | S.C. Code §11-35-45 |
| South Dakota | By the contract date, or within 45 days after receipt and written acceptance of the goods or services when… | Proper invoices unpaid after 45 days accrue interest from the 30th day after receipt at the Category B rate… | SDCL 5-26-1 to 5-26-8 |
| Tennessee | 45 days after receipt of the invoice, unless the contract sets another date | 1.5% per month starting the day after payment is due; interest unpaid after 60 days is added to principal | Tenn. Code Ann. §12-4-701 to -707 (Prompt Pay Act of 1985) |
| Texas | Overdue on the 31st day after the later of delivery, completion of services or receipt of the invoice; 46… | 1% plus the prime rate published in the Wall Street Journal, set annually | Tex. Gov't Code ch. 2251 |
| Utah | On the date set by contract, or within 60 days after a complete invoice if no date is set | IRS refund rate plus 2% to the prime; 15.5% per year to subs and suppliers not paid within 45 days after the… | Utah Code §15-6-1 et seq. (Prompt Payment Act) |
| Vermont | 20 days after the end of the billing period or delivery of the invoice, whichever is later | 12% per year (rate under 12 V.S.A. §2903), starting on the 21st day; an added 1% per month for wrongful… | 9 V.S.A. §4001 to §4009 (prompt pay for construction contracts; 'owner' includes the State, municipalities and school districts) |
| Virginia | State agencies: 30 days after receipt of a proper invoice or of the goods or services, whichever is later… | State agencies: the Wall Street Journal prime rate on amounts unpaid more than 7 days after the payment… | Va. Code §2.2-4347 to §2.2-4356 |
| Washington | 30 days after receipt of a properly completed invoice or of the goods or services, whichever is later | 1% per month (minimum $1 per month) on late payments | RCW 39.76 |
| West Virginia | 45 days after a legitimate uncontested invoice is received, for purchases made on or after July 1, 2025; the… | No interest for state agencies; a late agency must report the violation to the State Auditor, a vendor may… | W. Va. Code §12-10-1 to §12-10-3 (Prompt Payment Act of 2025, HB 2152) |
| Wisconsin | 30 days after receipt of a properly completed invoice, or after receipt and acceptance of the goods or… | Interest from the 31st day at the rate in Wis. Stat. §71.82(1)(a), which is 12% a year, compounded monthly | Wis. Stat. §16.528 (state agencies); Wis. Stat. §66.0135 (local governments) |
| Wyoming | 45 days after receipt of a correct notice of the amount due, unless the contract says otherwise | 1.5% a month on the unpaid balance from the 45th day until paid, unless there is a good-faith dispute | Wyo. Stat. §16-6-601 and §16-6-602 |
Questions people ask
How long does the federal government have to pay an invoice?
Under the Prompt Payment Act, agencies generally must pay within 30 days of receiving a proper invoice, unless the contract sets another date. If they pay late, interest is owed automatically at the Treasury Prompt Payment rate, 4.75% for July 1, 2026 to December 31, 2026.
Can I factor invoices to a federal agency?
Yes. Government receivables are among the safest a factor buys, because the payer will pay. To factor federal contract payments, the funder usually files an assignment of claims under the Assignment of Claims Act, acknowledged by the contracting officer and the disbursing office, so payment goes to the funder. Setup commonly takes a week or two longer than a commercial deal.
Do states pay interest on late invoices?
Most do. We found a state agency prompt payment rule for 50 of 51 jurisdictions, usually with a payment deadline of 30 to 45 days and interest on late payments. The rate and how it is computed differ by state; each state's row below cites its statute.
Why do government contractors factor if the government always pays?
Because "always" is not "fast". Proper-invoice rules, acceptance, and payment system delays can stretch 30-day terms to 60 or 90 days in practice, while payroll and suppliers are due weekly. Factoring turns an approved invoice into cash in a day or two.